Application of the provisions on company compulsory liquidation initiation to be postponed

The Business Registers Agency (SBRA) has announced that the application of provisions of the Law on companies, on initiation of companies’ compulsory liquidation and based on previous opinion of the Ministry of Economy and Regional Development has been postponed.

- There is no sufficient legal framework to fully regulate this matter for the implementation of compulsory liquidations - it is stated in the ministry’s opinion stated on the announced that the Business Registers Agency site.

- The Law on companies does not contain refereeing norms proscribing adequate application of the provisions governing voluntary liquidation proceedings or other legal provisions – it has been added.

- Since out of legislation, there are other matters such as legal consequence initiation of the forced liquidation ii enforced liquidation, and the purpose of forced liquidation provisions aimed at creditors protection, we think that there is a real danger that such insufficiently regulated institute of compulsory liquidation is abused and thus creditors’ interests may be deceived – it is written in the ministry’s opinion.

- Bearing in mind the purpose of forced liquidation provisions, statutory nature of registration, rights and obligations of company members and a creditor, the application in the case of absence of the competent authority or a member of society, we think there is a need for disposal of this institute until adoption of amendments to the Law which would govern these issues in more details – it was said in the opinion issued June 8, this year.